Vietcombank, Vietnam’s largest partially private lender by assets, will not be allowed to issue shares until it can find a foreign strategic partner.

The Hanoi-based lender, also known as the Commercial Joint Stock Bank for Foreign Trade of Vietnam, planned to raise more than one trillion dong (US$54.16 million) through the sale of 112.29 million shares to existing shareholders, with a ratio of 9.28 per every 100 shares.

The share issue, if approved, would boost Vietcombank’s capital to 13.2 trillion dong. According to the plan, the increased capital would be used to invest in infrastructure, technology and human resources and to expand funds for credit.

But the State Bank of Vietnam rejected the plan in mid-December, saying the bank needs to find a foreign strategic partner first, a requirement that it was supposed to meet to complete its equitisation process by listing in June.

Economist Le Tham Duong from HCM City Banking University said it was reasonable to require a foreign strategic partner for Vietcombank.

“Without a foreign investor, the equitisation of the bank won’t really be effective,” Duong said. “Foreign strategic partners will help Vietcombank improve its management and business plans.”

Vietcombank has publicly sought a strategic partner for the past two years, but without any success.

When the bank first announced plans to list the shares late 2008, Goldman Sachs, GE Money and Nomura Holdings were shortlisted as strategic partners for Vietcombank.

Prices, however, became an obstacle. Vietcombank set a price of 100,000 dong a share for bidding, but the foreign bidders would only agree to pay between 45,000 dong and 60,000 dong.

The bank then underwent an initial public offering, the first state-run bank in the country to do so, even without a foreign partner.

Then in June 2009 Vietcombank listed on the Ho Chi Minh Stock Exchange, still unable to find a foreign strategic partner.

Analysts said being the first state-owned bank to go public has created problems for Vietcombank. They said without any capital increase, the lender’s capital adequacy ratio would fall under 8 percent, the minimum level allowed by the central bank.